Things get controversial on this episode of Mind Over Markets. As the title suggests, we’re discussing demo trading and why too long on the stock market simulator can really hurt your chances at being a successful day trader. 

In all honesty, your success in demo does not guarantee your success in live trading. There’s no real risk involved in sim trading, so it can lead to you developing some really bad habits when it comes to trade strategy. This doesn’t mean you’re a terrible stock trader – you just need to learn how to use demo trading properly.

“Demo trading promotes and creates bad habits that end up losing you live money.” Click To Tweet

We typically see new traders overstay their welcome in demo. It’s a comfortable and safe place for you to practice day trading. Unfortunately, live trades are anything but safe and comfortable. Too much time in demo means too much time fake risking fake money. When you have real money on the line, your reactions can change pretty quickly. If you don’t have a well-practiced strategy in place, your first few live trades could blow up in your face.

We know because we’ve been there. We’ve made those mistakes and lost real money when we really didn’t have to. That’s why we’re doing this particular episode. We want to guide you away from these mistakes if we can, and we want to guide you out of them if you’re stuck in the middle. To start, here are five signs you’re overstaying your welcome on sim mode – 

  1. You’re trading at a bigger contract size than you plan to use when you go live
  2. You don’t have a checklist 
  3. You’re winning most of your trades most of the time
  4. You’re not journaling any of your trades 
  5. You reset your simulation data very often 

If you see yourself in any of those five signs, you need to start weaning yourself off of sim trading sooner rather than later. You don’t have to leave just yet. If you aren’t ready to trade in real-time, there’s no pressure to start. Here are some steps you can take to use simulation mode properly while you continue to learn:

  1. Learn how the price ladder moves and acclimate yourself with the trading interface
  2. Learn how to move, adjust, and cancel orders
  3. Get a feel for the volatility of the markets so you aren’t surprised 
  4. Practice your analyzation skills and learn the right time to execute your strategy

The trick to using stock market simulators is developing your strategy ahead of time. You never want to start demo trading without a clear plan in mind. Otherwise, that’s when all the bad habits start sneaking in. Instead, use demo mode as a way to test your strategies before you go live. That way, you’ll have a better understanding of what works, what doesn’t, and what you can look out for you so you don’t get scratched in your first live trade. 

We go into those 4 steps and more in this episode. Tune in now for our 2 BONUS STEPS on how to use simulation mode properly. If you’re a trader who’s ready to enter live trades, these bonus steps are for you. We tell you how you can get out of demo mode quickly without risking your savings account and start trading live today. There’s never been a better time to start day trading than right now, and with us here to tell you how to start using demo mode properly, you don’t have a single excuse not to start. 

In This Episode You Will Learn

  • An overview of how new traders typically think demo works 2:59
  • The biggest pitfall in demo trading 11:34
  • Five signs you’ve overstayed your welcome on sim mode 18:20
  • The six steps to using stock market simulators the right away 31:52
  • Ways to learn how to start with multiple lots without sim mode 49:50

Some Questions We Discuss

  • How does demo trading hurt your development as a trader? 4:42
  • What kind of bad habits was Mark developing in demo? 15:47
  • Why do we love micro contracts so much? 40:40
  • How can you use demo mode while you’re live? 44:20
  • How do you start trading live quicker without spending too much time on demo? 47:30


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